The European Commission has decided to impose fines totalling
€66.34 million on Akzo Nobel, BASF and UCB for operating a cartel in the
market for choline chloride,. Choline chloride, also known as vitamin B4, is
used mainly as a feed additive for poultry and pigs, to increase growth, reduce
mortality and improve meat quality. Clients are animal feed producers, which in
turn supply to European farmers. The level of the fines confirms the
Commission’s determination to crack down hard on companies engaged in
cartel practices such as price fixing and market sharing.

Competition Commissioner Neelie Kroes commented “The Commission will
simply not tolerate that the benefits of the EU’s Single Market are denied
to customers by cartels and other anti-competitive practices. We will not allow
the advantages of abolishing physical frontiers and creating pan-European
markets to be neutralised by companies carving up the spoils amongst themselves.
I have made it crystal clear that the fight against cartels will be one of my
top priorities as Competition Commissioner. This decision demonstrates that I
intend to walk the walk as well as talk the talk.”

After a careful investigation, triggered by information brought to the
knowledge of the Commission in the framework of its leniency programme, the
Commission has concluded that Akzo Nobel of the Netherlands, BASF of Germany UCB
of Belgium and Bioproducts and DuCoa of the USA, Chinook of Canada, colluded in
secret to set prices and share markets for choline chloride in the European
Economic Area (EEA) in violation of EC Treaty rules (Article 81).

Together the companies involved controlled around 80% of the world market and
of the EEA market for choline chloride. In 1997, the last full year of the
infringement, the world market for choline chloride was worth around €180
million and that of the EEA market over €50 million.

From 1992 to April 1994, the main North American and European producers of
choline chloride met in secret to increase worldwide prices, allocate world
markets and control competitors. The North American producers agreed to withdraw
from Europe, in exchange for the European producers withdrawing from North
America. Between March 1994 and October 1998, the European producers continued
to meet and agreed prices and price increases for specific national markets in
the EEA, allocated individual clients among themselves and agreed EEA-wide
market shares.

As the North American companies ended their participation in the infringement
in April 1994, they escaped fines, given that the first investigative action of
the Commission took place more than five years later.

The five year limitation period for the imposition of fines therefore applied
to the North American producers. Decisions are, however, addressed also to them,
in particular to warn them not to engage in any such behaviour in the
future.

The Commission considered the infringement to be a very serious one because
of its nature and its geographic scope. The Commission also took account of the
value of the EEA market for the product, the duration of the infringement, the
individual weight of the companies in the infringement, their overall size, the
fact that BASF had already been condemned for similar infringements before and
the co-operation each of the three European producers gave to the investigation.
As a result, the Commission imposed the following fines: